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Mes­sage from the Elec­ted Offi­cers

Integrated Annual Report 2019

Interview with the Management Team
Our way 2030

In these times of coronavirus, the cooperative concept is more important than ever. Thomas Stürtz (Chairman of the Board of Management of DMK eG) and Heinz Korte (Chairman of the Supervisory Boards of DMK eG and DMK GmbH) confirm that. As farmers, they are familiar with the challenges facing the farms, in their roles as elected officers in DMK’s executive bodies they evaluate the impact on the dairy company. They discuss the past fiscal year and the important milestones in the DMK Group’s transformation here.

Ladies and Gentlemen,

The current situation is an enormous challenge, and not only for the dairy industry. The coronavirus is dictating new constraints on our society that no one could have foreseen. In the spring of 2020, it is still very difficult to assess how the situation will change in the coming weeks and months, and we have to re-evaluate events and produce an appropriate response with every day that passes.

At DMK, we set up a working group early on to enable us to prepare our company for every scenario and coordinate all the necessary measures to protect employees and farmers. However, managing this crisis is a communal task. Prudent conduct and responsible action by every individual will help to slow down the spread of the coronavirus and therefore ultimately master the crisis successfully.

This moment reveals how much we benefit from the cooperative concept on which our company was founded: a strong cooperative is the basis of a strong DMK Group. The restructuring of our organisation will pay off now.

 

Our “we feeling” had already played a critically important role in 2019, both within the company and in the entire agricultural industry. Because the latter – as we all more and more clearly aware – is under huge pressure. On the one hand, there are the consumers’ and food retailers’ high and diverse demands, on the other, new laws and requirements imposed by government which make our work more and more difficult. It is all the more important for us to defend our interests together. Because these requirements cannot be delivered without an effort. And this effort has to be appropriately rewarded. This is why Ingo Müller prompted the idea of the Dairy Sector Strategy. With this strategy, we want to work together as an industry for a new and stronger position in society and politics, so that we can present our interests on a basis of equality.

What applies to the dairy industry as a whole also applies in quite concrete terms to the DMK Group: We cannot, and have no desire to, ignore our customers’ wishes, if we did so we would find ourselves on the entrepreneurial scrapheap. That is why we launched the realignment of our company in 2016 – an important step in future-proofing the DMK Group. With the engagement of every department and the committed work of the farmers, who also supported this project, we succeeded as a community in setting DMK on a new track.

However, our journey did not end there. In June 2019, we presented our Vision 2030. In this Mission Statement, we not only set down the DMK Group’s new direction, but also formulated clear goals. We will prepare ourselves for the changing world of the next 10 years by achieving these goals. To do so, we want to focus our attention even more on consumers and grow into a partner who will be with them in every phase of their lives with high-quality products.

 

At the same time, however, we have not forgotten our roots as a cooperative and a farmers’ company. Quite the contrary, the dialogue between DMK and the farmers is an important concern for us. We therefore work continuously to enhance the dialogue even further, even if this presents us with challenges against the background of the coronavirus pandemic. Because the important work of the executive bodies in particular ensures greater transparency and openness. Both are absolutely essential to our aim of supporting farmers and rewarding their work with fair pay. Their concerns led the way to last year’s actions and will always be incorporated in the implementation of the 2030 Mission Statement. For example, we made significant changes in the Milkmaster Programme to make it easier for farmers to deal with. At the same time, a new digital platform was added - myMilk - which will simplify contact between DMK and the farmers. At the request of many farmers, we also made the accounting for the milk payment more transparent and updated the bonuses for GMO-free milk production, logistics and cooling costs.

Nevertheless, the fact is that that the milk price was not as high as it should have been last year. The price lagged behind expectations in 2019 and was around 1 eurocent below the benchmark average of our competitors. There were three main reasons. On the one hand, market conditions, which placed a great strain on the entire industry in 2019. On the other, we had to absorb a reduction in the milk volume of 1 billion kilos of raw milk. In addition, ongoing capital investment projects had to be completed, such as the building of the Strückhausen factory, the new spray tower in Beesten and the consolidation of the ice cream division. These expenses were at their highest point in 2019 and affected the accounts accordingly.

However, the good news is that almost all the projects have been completed, so we can now operate under different financial conditions. We can now leave the burdens inherited from past years behind us and focus entirely on the future. This important preparatory work will now help us to stand our ground in the coronavirus era and pursue our path further after the crisis in the interest of the farmers. Step by step, and in close consultation and open dialogue with our farmers and employees, we will turn our Vision 2030 for the DMK Group into reality. Ultimately, this will enable us all to benefit from the transformation as a community. Even in challenging times like these, we are certain of that.

 

Heinz Korte, Chairman of the Supervisory Board of the DMK Group

Thomas Stürtz, Chairman of the Board of Management of Deutsches Milchkontor

 

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Integrated Annual Report 2019